As many are aware Senator Obama raised $52 million in June. While that is the number being used in the media and in some of the diaries/stories on this site, actually the most important number to watch is Senator Obama's cash on hand. Why you may ask, I well explain below.
As you all know Senator McCain is slated to pick up $84.1 million in public financing the first week of September. That is a large chunk of change to begin with to spend (and he will spend it all because he cannot raise any more money for himself afterwards and there is little to gain by saving the money for after the election). Therefore it is important for Senator Obama to have AT LEAST that much money in the bank to begin spending the first week of September. To do that he has to build up cash reserves over the summer months that will at least equal that $84.1 million number. Such cash reserves are referred to as a candidate's cash on hand or sometimes COH.
In releasing his overall June fundraising numbers, Senator Obama also disclosed that at the beginning of July he has $72 million cash on hand. In other words, he is $12.1 million dollars short of reaching the $84.1 million he, AT A MINIMUM, he needs to have on hand come the beginning of September.
Now it looks like Senator Obama spent roughly somewhere around 11 to 12 million of the cash on hand he had at the beginning of June (I'm basing this on the COH he had as of the beginning of June ($43 million overall) subtracting that from the COH he disclosed as of the beginning of July ($72 million) then subtracting that from the money he raised in June ($52 million), and then taking out roughly 12 million for the amount that I know of that Obama raised which was general election money and hence cannot be used until after the convention. Given that Senator Obama did not start with his 18-state ad campaign until the middle of June, I'm extrapolating that for the month of July he would be spending roughly a little less than double that number, so somewhere close to 20 to 25 million. Therefore for Senator Obama to reach the $84.1 million COH he needs to raise somewhere between $32 to $37 million during the month of July.
Why is it important for Senator Obama to get to the $84.1 million number as quick as possible?
The simple answer is that once Senator Obama reaches that number in the bank, the amount of money he needs to raise each month decreases substantially to only that of maintaining his existing expenditures, meaning roughly 20 to 25 million a month. Every dime Senator Obama raises over that number in the months ahead can be used to either increase existing ad/GOTV expenditures in existing states he is already advertising in or go with ads in new states (both courses of action being something many people here have been asking for), pad his COH so that he has that much more to spend come after the first week of September against mccain, or do a little of both. The sooner Senator Obama reaches that $84.1 million COH tipping point, the less time he needs to spend fundraising (even in his worst month he raised $22 million, which is very close to what is needed to simply cover existing costs) and the more time he can spend on the campaign trail. Again another benefit it that it means the sooner he can up the tempo of ad expenditures, increase his ground presence in states, and pad his war chest for the fall contest.
Many of you will respond that the $84.1 million COH number is not enough because the RNC is also fundraising to help McCain. I understand the RNC has told Congressional candidates that they are on their own this year, but frankly I'm not buying it. The RSCC and RCCC are getting clobbered financiailly by their Democratic counterparts, the DSCC and DCCC. This money disadvantage is starting to play out with the DSCC dropping a $6 million money bomb on the North Carolina senate race and other competitive Senate races, with nary a peep from the RSCC. If that kind of spending is being done by the DSCC in states like Maine, Minnesota, Mississippi, Oregon, Alaska, Colorado, New Mexico, and Kentucky, the RNC will be forced to recant on its McCain or bust strategy; simply put the RSCC cannot keep pace with such a money blitz.
It is this imbalance that I think has led the RNC to essentially agree to serve as a bridge loan to help cover McCain through the summer months until he can get the $87 million in public financing. Even if the RNC believes the chances of retaking the House and Senate are non-existant this year they surely do not want to leave their presence in Congress to drop into a deep hole, such that there would not be much, if any, Republican left in Congress to support a President McCain should that even occur. Right now the RSCC and RCCC simply do not have enough money to avert that from happening, they will need RNC cash to help them out. Plus, the RNC does think longterm, it cannot allow a deficit to develop that is too deep for it to one day to retake either chamber (I seriously doubt they want to wait another 40 plus years to retake the House). Cutting their Congressional candidates adrift would cause such huge losses in both or either chambers that in the end the RNC will be forced out of necessity to defend some seats. Thus, some hedging will occur, with the RNC I suspect beginning by supporting individual Republican Senate candidates in August and then moving to certain House races in September. Given that only some of the RNC money will be there to help McCain I think it is a mistake to attribute all of it to his campaign coffers. The DNC on the other hand does not suffer from a similar predicament because as I said the DSCC and DCCC are flush with money. This, of course, requires that the DNC roughly keep pace with the RNC as they did for the month of June. I would assume that a number of Obama big wig donors can be and have been asked to max out to the DNC, and then return back to max out to Obama's general election coffers. Regardless of where the money comes from, however, the DNC needs to keep it as close as possible with the RNC. Meantime Obama needs to keep outpacing McCain by wide margins over the next two months.
Long story short, the sooner Obama gets over $84 million COH, the sooner he can ramp up his advertising and GOTV efforts over the summer months (before the convention) in existing states he's competing in as well as expand to even more states.
I don't know if any of this is helpful, but I just thought that it was important to look at the right fundraising numbers when they come out each month.
Here's hoping to big and better fundraising in the months ahead for both Obama and the DNC and for a wave of blue come election day.